A step-by-step guide to changing strata managers

You were excited when you first moved into your sparkling new apartment. You’d budgeted for the strata levies, understanding that they were paying for the gardens to stay neatly trimmed and the lifts to work smoothly. But recently, the complex has been looking a little shabby. The exterior needs repainting, but the work hasn’t been done. A light in the lobby hasn’t been fixed for two weeks. You’ve been meaning to raise it at the AGM, but your strata company hasn’t yet scheduled one and nobody is returning your calls.

If this sounds familiar, it might be time to consider whether your strata manager is doing their job. Sometimes, it can be solved with a conversation. On other occasions, there’s nothing to do but change managers. But what are the warning signs, and how do you dismiss a strata manager?

We spoke to Tarnee Lamb, New Business Manager for Civium Strata, to find out why, when and how to change your strata manager.

When is it worth changing strata managers?

Can't decide whether to work things out or change strata managers? It can be hard to know whether your experience is par for the course or a parade of red flags. Termination of a strata manager can be a big decision, so don’t take it lightly.

“What’s the most common thing we hear from people who are unhappy with their strata management company? That they don’t respond to communication or don’t take action,” says Tarnee. “If an owner calls up to report that the lights are out in part of the building and nothing is done to fix that, people get unhappy very fast.”

Sometimes, you can fix the problem just by highlighting the issue. “There’s plenty we can do to help if we know that an owners corporation is unhappy. If it’s a personality clash, we can assign a different strata manager to the complex. Sometimes it’s as simple as agreeing on turnaround times."

Other times, the issues run deeper. If complaints about your strata manager involve the following, it might be time to change companies.

• Substantial levy arrears. Chasing levies is an integral part of your strata manager’s role. There will always be a few late payers, especially in a large complex, but they should be kept to a minimum. If your scheme has a huge hole in the budget, it can cause problems down the track when things come due—and it speaks to a strata manager who is not doing their job.
• Shabby common areas. Overgrown gardens? Elevators always out of service? Peeling paint? If your complex is looking run down, your strata manager might be falling down on the job. A good strata management company responds quickly to maintenance and repair requests and develops a proactive schedule to keep the property in great condition.
• Late AGMs. Legislation requires your owners corporation to hold an AGM every year, within three months of the end of the financial year. If your scheme is scheduling AGMs late—or worse, not at all—you could find yourself in real trouble.

How to change strata management companies

If you haven’t been able to resolve the problem, you’ll have to change companies. Here’s the step-by-step process for doing so:

1. Check your current agreement

Ask your strata manager to provide you with a copy of the current agreement between the strata management company and owners corporation. This sets out:

• The length of the contract and expiration date
• The terms under which the agreement can be terminated early
• The form in which notice should be given, whether written, via email or otherwise
• The length of the notice period
• Any extra procedures that must be completed before the strata manager can be changed

Generally speaking, a contract can only be terminated before its expiration date if the strata management company has breached its terms. Most contracts allow a period of time for the strata manager to mend the breach before the termination procedure can be started.

It is important that you follow the terms of the agreement correctly. Otherwise, the owners corporation might find itself the subject of a lawsuit. Get legal advice before proceeding if you are terminating the contract prior to the expiration date.

2. Decide on a new strata manager

You may have decided to change strata management companies, but you can’t end the agreement without knowing who your new company will be.

“Normally the executive committee makes the decision,” explains Tarnee. “They have a meeting and decide to get some tender proposals. That might mean sending out an invitation to tender, or just ringing around and getting some pricing from local companies. Once the executive committee has decided who they want to go with, they put together a document outlining their recommendation for the owners corporation.”

Need some guidelines on how to choose the right company? Check out our comprehensive article on choosing a new strata manager here.

Strata managers worth their salt are happy to visit your building and provide a detailed quote and proposal to ensure they meet your requirements. They’ll also be happy to go through their systems with you to alleviate any fears of the same problems recurring.

“At Civium, we work in teams,” Tarnee says. “That means that even if your nominated strata manager isn’t at their desk, there are three other people who all know your scheme and your building who can respond. That’s a real win for owners who have had communication problems with strata companies in the past.”